Why it is important to learn psychology

When I tell people that it is important to learn psychology to invest in the stock market, they assume it is to be able to analyze the market's psychology. They get it all wrong.

You need to learn psychology to protect yourself from yourself.

Recognizing your own actions can be just as irrational and emotional as everyone else is the essential thing you need to know. Only then can you use psychology to correct your own cognitive deficiencies, so you can hopefully make slightly better decisions than the rest of the crowd. This is what makes you a stronger investor.

Only after learning how to correct your own irrational behavior, you can start to entertain the idea of playing market psychology. Don't get too cocky though, because more than likely the market will be playing with your psychology.